January DRAM Contract Price Upped 5%
The authors are analysts of NH Investment & Securities. They can be reached at kyuha.lee@nhqv.com. -- Ed.
The January DRAM contract price has been upped 5% y-y, the first price rise since May 2020. Recently, PC sales have been robust. In 2020, global PC sales reached 282mn units (+10% y-y), the highest in 10 years, thanks to structural demand growth amidst greater telecommuting and online education. Notebook PC ODMs and brand companies predict that strong PC sales will continue in 1H21. Overall, 2021 PC sales are to expand 5% y-y.
We note that the entry of new players (such as AMD and ARM) into the Intel-dominated PC market has contributed to PC sales growth. Recently, AMD unveiled the new Ryzen5000 processors based on Zen 3 architecture. As for ARM, demand has been soaring upon Apple’s roll-out of M1 processors based on ARM architecture. Apple is to unveil its next-generation processor within 2021, and ARM architecture is to be applied to desktop PCs. In response, Intel is preparing for the launch of new-generation Alder Lake processors equipped with Foveros 3D stacking technology. All in all, strong PC sales bode well for the memory industry.
Whitley platform adoption to boost server demand
Server demand to be driven by launches of new server processors
We believe that shipments of servers equipped with Intel’s next-generation server platform Whitley will accelerate going forward, a development that bodes well for server demand. Of note, the Intel server platform change represents a major event propelling robust demand every four~five years. We note that global server demand came in strong over 2017~2018 in line with the arrival of Intel’s Purely platform. The Whitley platform supports up to eight memory channels, thus helping to boost memory content per server going forward.
We also point out that the slated roll-out of server EPYC processors embedded with AMD’s 7nm Zen 3 architecture in end-1Q21 should positively affect server and memory demand. AMD’s EPYC processors have been welcomed by hyperscaler clients for their sound performance and cheaper price compared to Intel’s Xeon processors. As AMD’s M/S in the data center market has risen to 7%, Intel has ditched its high-margin policy and begun slashing server processor prices.
